Median forecasts in the poll of 19 analysts indicated the central bank would leave the deposit rate at 24% and the lending rate at 25%.

The central bank lowered rates by 100 basis points on May 22 and by 225 basis points on April 17, its first adjustments since March 6, 2024, when it hiked rates and let the currency slide sharply against the dollar, part of an $8 billion International Monetary Fund financial reform package.

But after plummeting from 24.0% in January to 12.8% in February, inflation has been steadily creeping back up, reaching 13.6% in March, 13.9% in April and 16.8% in May.

"With inflation having increased in May and recent global market turmoil, we think that the CBE will continue with a more measured pace of loosening," said James Swanston of Capital Economics, who predicted a 100 basis points cut.

Egypt's central bank had been working to reduce inflation, which has trended downwards from a peak of 38% in September 2023. At its monetary policy committee meeting in April, the central bank said lower inflation had opened the way to further rate cuts.

The central bank has been tightening money supply since signing its agreement last year with the IMF, officials and bankers say. M2 growth fell to an annual 25.8% to the end of April from a recent peak of 33.9% to the end of February.

While the majority of the analysts polled expected the deposit rate to remain unchanged at 24%, seven forecast a cut of 100 basis points.

--Reuters--